The push is on to redevelop Miami Beach’s North Beach. The area from 63rd Street to 87th Street and westward from the ocean to the bay has lagged when compared to South Beach or Mid-Beach, which has seen explosive development in recent years.
Just last year, plans to develop the Ocean Terrace historic district, between 73rd Street and 75th Street were rejected by voters. Since a charter amendment was passed in 1997, voter approval has been required for up-zoning changes involving an FAR increase in areas facing the water. The amendment was strengthened in 2001 to include inland areas as well.
With that in mind, city officials pledged that any development plans for North Beach would get a full public airing before being approved, and next week, the city will hold a design charrette, open to the public to discuss a proposed Master Plan for North Beach. Town planning firm Dover Kohl & Partners which has been selected by the city to produce the master plan, will hold the charrette at the city-owned Byron Carlyle Theater.
Jeff Oris, economic development division director in the city’s Office of Tourism, Cultural and Economic Development, said that it’s the public’s chance to decide what happens in North Beach. “Our best job is to get people out to say what do you want your North Beach to be, and ultimately when we have a plan we want it to be the community’s plan,” he said.
Jason King, a project director and town planner with Dover Kohl, said a master plan for North Beach will be comprehensive, involving land development regulations, zoning, budget priorities and the design of streets and public spaces.
“This plan won’t just sit on the shelf, because it really is North Beach’s time,” he said. “If you look at South Beach or Mid-Beach or Surfside, North Beach has really been inexplicably passed over in terms of investment, but the secret is out,” he added. “There is going to be change in North Beach, and the question is how much and where, and what kind will it be, and if North Beach will be a better place for it.”
Community activists like Kirk Paskal, who led the fight against developing Ocean Terrace last year said, “the community is engaged,” and that all North Beach residents want is a “balanced plan.”
Commissioner Kristen Rosen Gonzalez, who won an upset victory last year largely backed by neighborhood activists and preservationists, said North Beach residents “don’t want large towers and they don’t want more density.” What they want, she said, is more “mass transit,” she said, and while the area needs to be upgraded, it doesn’t need big changes. “It’s very charming, and I don’t think it needs that much revitalization. It’s a beautiful neighborhood.”
Industry experts say Miami’s hotel market could be reaching its peak in 2016 as revenues and occupancy rates begin to level out.
Last year was solid for the individual hotels that make up Miami’s leisure industry: more than 44 million travelers passed through the Miami International Airport, a bevy of new hotel developments opened their doors and room rates saw steady gains compared to 2014.
Occupancy rates hovered around 78 percent, mostly flat from the previous year, and hotel owners’ average revenue per room grew to nearly $153 — about a 6 percent jump, according to year-end data from STR.
“On one hand there’s a story about what’s going on at the property level, and then there’s a separate story about how buyers and sellers and lenders are acting right now and how the transaction market has been,” Max Comess of brokerage HFF said. “The stories have been a little disconnected.”
Comess said turmoil in global markets has started to put a damper on activity from certain investment groups and lenders as their strategies become more cautious. Plunging stock markets hurt real estate investment trusts in particular, he said, whose share prices “fell precipitously” compared to the highs seen earlier in 2015. One example of that early-year bravado was the $278 million sale of the former James Royal Palm in South Beach to the Chesapeake Lodging Trust.
That closing came in February, which also saw the $230 million sale of the Miami Beach EDITION to the Abu Dhabi Investment Authority “The REITs for the most part have exited the market,” Comess said. “They were really driving South Beach, downtown Miami; a lot of the resort markets throughout the state.”
Another factor playing into the market right now is a strong U.S. dollar shrinking the appetite of foreign travelers and investors, he said.
Less purchasing power for tourists abroad roughly equates to fewer hotel rooms booked. South American countries in particular are facing harrowing economic conditions, which Comess said is troubling because Miami is such a hub for that continent.
However, Comess said these trouble spots don’t mean Miami’s hotel sector is in bad health. If anything, it’s “bouncing off the top” as it starts aging into its golden years. Wendy Kallergis, president and CEO of the Greater Miami and the Beaches Hotel Association, would agree.
“It’s going to even out because we had so much growth in 2015,” she said. Hotels this year got a slow start, she said, at least partially because the northern states enjoyed warmer holidays than usual. But she expects business to return to normal during the spring, especially with big-ticket events like the annual Ultra Music Festival bringing in travelers.
She also said occupancy leveling out is a byproduct of more hotels opening their doors as opposed to a decrease in demand. Miami Beach alone saw the opening of the Edition, Faena Hotel, Nautilus, Aloft, Hyatt Centric, Hampton Inn Miami South Beach and 1 Hotel South beach, altogether bringing just under 2,000 rooms online in a single year. That trend will likely continue as the EAST Hotel at Brickell City Centre, Langford Miami in the downtown area and the Surfside Residence Inn all open this year.
And while the market maturing usually means a return to stability, the year will not be without its trials, experts say. “We expect this year to be challenging. The Miami Beach Convention Center is closed; several hotels are already reporting that this is leading to a loss of business,” Paul Weimer, vice president of brokerage CBRE’s hotel division, said .
[The convention center is not fully closed as events like Art Basel will still take place there, but it is taking no new reservations while renovations are underway.] “The dollar has remained strong, making it more expensive for international travelers. Many of our feeder markets continue to experience economic issues… I think we will be very lucky if RevPar ends unchanged year over year.”